>> tom: oil prices continue their march higher, but the federal reserve chairman is not worried. >> the most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in u.s. consumer price inflation. >> susie: the latest on inflation and what it'll take to end the fed's government bond buying binge. you're watching "nightly business report" for tuesday, march 1. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. ben bernanke said today the federal reserve is ready to take action if high oil prices threaten the economy. susie, the fed chief's comments came on a day when oil prices gushed higher. >> susie: tom, as bernanke was testifying on capitol hill in washington, oil futures trading here in new york surged to just below the $100 level. april crude rose $2.66 a barrel, or more than 2.5%. and those rising oil prices triggered a stock sell-off on wall street-- the dow fell 168 points, the nasdaq lost 44, and the s&p 500 off almost 22.

>> tom: against that market backdrop, bernanke explained the fed's policy to keep the economy growing. darren gersh reports. >> reporter: the new normal for federal reserve chairman ben bernanke goes something like this: republicans in congress push back on the fed's bond buying program known as quantitative easing. the fed chairman argues the program is working, boosting the economy. today, bernanke went a bit further, giving senators a clearer sense of when the fed would begin reversing course. >> once we see the economy is in a self-sustaining recovery and employment is beginning to improve and labor markets are improving, and meanwhile that inflation is stable at approaching roughly 2% or so-- which i think is where you want to be in the long term on inflation. at that point, we'll need to begin withdrawing. >> reporter: asked if markets were counting on the fed to remain a huge buyer of bonds, the fed chairman said past

experience showed markets had already priced in the end of the fed program. if interest rates spike, bernanke said it would be because of what happens at the other end of washington's famous mall. >> what the markets are looking at is the long-term fiscal discipline of the u.s. government. and whether or not interest rates will spike or whether they'll remain reasonable depends far more on congress's decisions about long-term fiscal planning than anything the fed is going to do. >> reporter: asked about the battle now raging over raising the nation's debt limit, the fed chairman urged congress to get on with forging a long-term budget deal. >> not increasing the debt limit is like saying, you know, "we're going to solve our family's financial problems by refusing to pay our credit card bills." these are bills that have already been accrued, as opposed to cutting up the credit card and say, "going forward, we're not going to do any more spending." >> reporter: another spending battle-- this one over a potential government shutdown-- was pushed back today. this afternoon, the house passed

a two-week extension of government funding. senate democrats said they now support the bill, which also cuts $4 billion in spending. darren gersh, "nightly business report," washington. >> susie: now that we have a better idea of how bernanke and fed policymakers are dealing with inflation and interest rates, how are central bankers in europe handling these complicated economic issues-- the same way or differently? as erika miller reports, the answer could impact the global economy. >> reporter: whether you are in europe or in the u.s., there's almost no question inflation is creeping higher. the question for central banks is whether to take steps to restrain it. unrest in libya has caused energy prices to skyrocket, and if the trend continues, it could push up prices for other goods and services. the federal reserve is taking the threat in stride, as fed chairman ben bernake told lawmakers today. >> the most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and

relatively modest increase in u.s. consumer price inflation. >> reporter: the u.s. central bank has less pressure to raise rates than its european counterparts because its mandate is different. the fed is supposed to do two things-- ensure stable prices and encourage maximum employment. economist steven wieting thinks there's another reason the fed will not raise rates. >> inflation is not likely to be a serious lasting threat in the united states. and most importantly, i can count 14 different commodity price rallies since 1980, and we've had mostly significant dis-inflation, slower rates of inflation ever since. >> reporter: but most economists do think european central banks will raise rates, perhaps in just a few months. that's because fighting inflation is their only goal. economist michael feroli says european central bankers are also less worried about the downside of higher rates. >> the europeans are also facing also a different growth and unemployment backdrop. european unemployment is not

nearly as high... hasn't moved up as much as it has in the u.s. and for that reason, i think you'll see different reactions from the e.c.b. and the fed right now. >> reporter: of course, higher european rates won't just affect that region. some analysts worry it could hurt global growth, reducing profits at big multinational firms. >> higher interest rates in europe probably will weaken the european economy and our exports to europe. europe has not been the motor for u.s. exports, but i think more generally, when you look around the world, as central banks increasingly put on the brakes, that may slow the pace at which exports grow from the u.s. >> reporter: if you're worried interest rates might start rising here, relax. it's likely to be a while. most economists don't think the fed will hike rates until the labor market is solid footing, and that's not expected until at least next year. erika miller, "nightly business report," new york.

>> tom: here are the stories in tonight's "n.b.r. newswheel:" a pickup in activity at the nation's factories last month-- the institute for supply management's manufacturing index hit its highest level in almost seven years, rising to 61.4 in february. treasury secretary geithner told house lawmakers it would be a mistake to end the administration's home loan modification program, known as hamp. he thinks it would cause a huge amount of damage. house republicans vote tomorrow to kill the program. and a new man in charge at the federal reserve bank of san francisco. john williams was promoted from research director to president and chief executive officer. he replaces janet yellen, who left to become the vice chair of the federal reserve board. still ahead, tonight's word on the street-- "iphone." we go inside apple's blockbuster device for a look at the stocks profiting on parts for the iphone. >> susie: more signs of instability in the middle east--

the stock market in saudi arabia plunged 7%, the biggest drop since 2008. egypt once again postponed the reopening of cairo's stock exchange. it's been closed for a month. and hostilities continue in libya. despite this turmoil, some investors still see opportunities in the middle east. our guest is one of them, ahmed fattouh. he's c.e.o. of globalist capital management, a private equity firm and hedge fund that invests in the middle east and emerging markets. >> welcome to "nightly business report." >> thank you. >> susan: so you've been to egypt several times during the turmoil and upheaval. i know have you a lot of contacts in the middle east. give us your perspective on the near term political and economic outlook for the region. >> well, mean, again, we're very much in uncharted territory. everyone asks this question, and we have no crystal ball as to what the outcome will be. what we can say is volatility does create opportunities.

and for, you know, a longer term -- from a longer term perspective, bottom-up investors will have an opportunity to profit from what's going on if they can get away from the immediate paranoia. >> susie: what kind of opportunities are you talking about? >> well, it's different in each market. it is very easy to lump the middle east as all one market. but you're talking about 15 or 16 different markets. in egypt, obviously, the market has been closed for a month. it's very likely we'll have indiscriminate selling when it finally reopens, whenever that is. i know it was expected to be sunday and it was delayed a couple of times. that means people will be selling for reasons that have nothing to do with fundamentals. it will be liquidity driven and psychology. if the selloff is deep enough, i think you'll see quite a few hedge funds and distressed investors step into that market.

>> susie: i know that you and your partners are working on a transaction in the united emirates. we have been hearing about investment, euphoria, and growth opportunities. do you see that changing, and are any of your investors having second thoughts? >> clearly most investors are taking a wait-and-see approach to the middle east. the transaction you're referring to, i think is a private equity transaction, and ultimately has the duration and long-term horizon, and it is an asset-heavy transaction. it is not so focused on near term prospects and liquid and mom tum -- momentum, and so on. it is creating an opportunity for us to step in in a less competitive field. >> susie: you talk a locabout opportunities. but we have to talk about the risks, too. this is for investing for

a certain type of investor, right? >> very much so. i think it is populated by the retail investor, and then you have foreign investors. you don't have that many long-term, institutional, local investors, which would create a floor to market activity. again, we see it as an opportunity, but no one is trying to catch the falling knife here. there are risks. the political situations are far from clear yet. and, you know, you're really going to have to see country by country how the governments are responding to the uprisings and descent. >> susie: real quickly, what is it going to take for these various countries to attract foreign investors again? what do they have to do? >> it is probably different in each country. in the gulf countries, i think you'll see those

countries -- they have an awful lot of liquidity. plenty of accessory serves. you'll probably see the government spending heavily on their populations, and provided that you don't have the source of outcomes you had in egypt, in terms of an massive political change, there i think it is just going to take some time for people to see that the emirates are putting the money into the businesses and flowing through the earnings. but a place like egypt -- >> susie: i'm sorry, ahmed. i'm going to have to cut you off. i really would like to continue this conversation. but we've run out of time. and you've given us a lot to think about. thank you so much for coming on the program. >> no problem. thank you for having me. >> susie: we've been speaking to ahmed fattouh, he is the c.i.a. of globalist management capital.

>> susie: sales of new vehicles revved up last month as consumers took advantage of incentives. general motors sales jumped 46% in february. toyota posted similar numbers, up 42%. both companies were coming off of weak year-ago figures. ford and chrysler each gained about 13%, with ford helped by smaller, more fuel-efficient models. ford sales analyst george pippas expects that trend to continue as gas prices rise at the pump. >> we've done extremely well the last two years in an area where fuel prices were relatively benign and not really

threatening to the consumer, and we seem to be doing well as gasoline prices rise. so we're pretty confident now that we've got a full range of products and excellent fuel economy to be able to take advantage of a situation that has rising gasoline prices. >> susie: pippas expects ford sales to keep growing, as the spring selling season kicks off. but tom, despite those strong sales, shares of g.m. and ford were pulled down with the rest of the market. >> they certainly were, susie. in fact, general motors falling a nickel below it's price from last fall. lots of selling happening this 1st day of march. let's get everybody updated in tonight's "market focus." the first day of march did not follow recent history and head higher. instead, we began the new month with some stiff selling. we start with the day's trade of the s&p 500.

gains very early gave way to selling, with the index hitting its low of the day at the close. let's pull out to the past 30 sessions of trading, showing the sell-off last week. and we remain above that low tonight, even with today's drop. sectors that have helped carry the market to post-recession highs last month got hit the worst. exchange traded funds following materials, industrial and the financial sectors each dropped by at last 2%. we don't have to look any further than the three biggest losers of the dow industrials to see this. alcoa fell 3.7%. volume was lighter than average though. from its low last summer, shares still are up more than 60%. general electric is an industrial and financial giant. shares dropped more than 3%, taking them back to the lows of

last week. chemical giant dupont was off 3%, showing a very similar pattern of rising from the summer lows into selling pressure the past week. the strength was in precious metal miners. gold miner newmont rose 1.5%. those with silver mines did even better. silver wheaton rallied 2.5%. coeur d'alene jumped more than 4%. buyers found their way back to gold, some traders pointing to higher energy prices and climbing inflation worries. gold moved up almost 2%, closing at $1,431 per ounce, just shy of its all-time high. silver, meantime, is at its highest price in a generation, rising more than 2.5%. prices were at $30 an ounce just two weeks ago. they were half that price a year

ago; tonight, in the mid-$30s. while some food commodity prices also have been moving up, banana prices are not among them, and that hurt fresh del monte's fourth quarter. almost half of its revenues come from bananas. its results were disappointing, and shares fell 6%. chiquita brands also dropped 6%. medical device maker boston scientific saw volume double on its move of 5% higher today. the rally takes the stock within less than 50 cents of a new high. r.b.c. capital upgraded its opinion to outperform, looking forward to a new heart stent that will go on sale next year in the u.s. and that's tonight's "market focus."

>> tom: apple is expected to unveil its newest version of the ipad tomorrow, coming just a couple of weeks after verizon starting selling the iphone. while apple's name is outside the phone, several other companies make the gear inside. tonight's word on the street-- "iphone." james rogers is a reporter at thestreet.com. >> tom: james, always nice to see you. a couple of companies, at&t and verizon are now selling the iphone. what is the opportunity for the iphone suppliers? >> as i said on the show last year, tom, companies that provide components to apple can wind up doing really, really well. well the ipad or in this case,s verizon iphone. verizon said last week the iphone was the most

successful launch in the company's history. >> tom: it begins with qualcomm, and it has been around for a long, long time. known as the communication chip company. it was close to $60 per share. is the verizon iphone priced in? >> yeah. i think to a certain extent it is. we all knew this was coming. just to recap, qualcomm provides a 3g wireless chip for the new iphone. and the company was one of the regions at the tech sector rally. i think it has a really good long-term story out there for investors. some things that are necessarily outside of the verizon iphone. for example, nokia stre strengthened it. and it could serve as a springboard, and fall into markets such as china. >> tom: we can certainly see that with some other firms getting more

well-known in the industry with its work with apple. sky works perhaps one of them. it makes semiconductors to go with apple. the prices have doubled. james, what could it be? >> it has been pretty significant. sky works is one of the street breakout stocks. the company was already providing power amplifiers to the earlier iphone 4. it has been enjoying really, really strong momentum, and doubled its quarterly profit, and also gave really strong guidance. two big strong things there for advisories. but the company's stock has been on a real, real surge. maybe this is one area where investors need to wait for a pullback. >> tom: about serious logic, which makes audio conductors. give us 20 seconds on cirrus. >> they also provide audio technology to the

current ipod and the earlier iphone 4. the company is talking about growing their sales faster than the broader semiconductor markets and expanding their workforce. i think there is a lot of real positives with this firm. but, again, investors may need to be careful and wait tor a pullback. >> tom: and we still have to wait until it is revealed tomorrow, but some of these companies could be representative. >> we should wait for the teardowns, and then we'll have a clear idea. >> tom: any ownership, james, in these stocks? >> none whatsoever. >> wayne: word on the street with james rogers. >> susie: here's what we're watching for tomorrow: quarterly results from b.j.'s wholesale and costco; the federal reserve's beige book of regional economic conditions; weekly numbers on mortgage applications; and crude oil supplies.

and hilary kramer is back as our "street critique" guest. send your questions for her to streetcritique@nbr.com. the s.e.c. has charged a former goldman sachs director with insider trading. rajat gupta is accused of leaking confidential information to the galleon group. galleon's founder raj rajaratnam is awaiting trial on securities fraud and conspiracy charges. now, investigators say gupta gave tips to rajaratnam about goldman, including berkshire hathaway's plans to take a $5 billion stake in the wall street firm. gupta's lawyers call the charges baseless. goldman sachs has not commented. >> tom: a corporation is not a person and doesn't have the same protections when it comes to the release of documents held by the government. that's the ruling today from the u.s. supreme court in a case involving at&t. the telecom giant wanted to prevent the release of thousands of company documents gathered during a f.c.c. investigation into billing practices. competitors sued under the freedom of information act to see those papers.

a lower court ruled in favor of at&t. that was overturned today. >> susie: with the launch of a >> susie: with the launch of a new ipad expected tomorrow, tonight's commentator has a few thoughts on how tablets will revolutionize productivity, including his own. here's justin fox, editorial director at "the harvard business review." >> back in 1970s, when the

computer began making inroads in the workplace, we were told that the modern office would soon go paperless. not quite. consumption of office paper doubled in the '80s and '90s, and the paperless office became something of a joke. it certainly was for me. anything longer than an email, i wanted on paper. the internet was where i searched for things to print. then, this christmas, i got an ipad. i don't mean this to be an apple ad. before long, there will be lots of other tablets that do even more. what can't be denied, though, is that this device has sent my paper consumption plummeting. i suddenly find myself doing most of my work reading onscreen. this could just be because it's a new toy. i think it's more than that. it's liberating to get on a plane without a stack of papers weighing down my backpack. it's liberating not to constantly forget or lose things i'd been meaning to read. there are downsides to not using paper, but on the whole, this is better. so, okay, paperless office, you took a while to get here, but i think you're about to clean up.

>> susie: just a reminder-- you can catch us online at nbr on pbs.org, or follow us on twitter, "@biz report," or my personal feed, "at s- gharibnbr". if tweeting isn't your thing, "friend" us on facebook at "biz report." >> susie: that's "nightly business report" for tuesday, march 1. i'm susie gharib. good night, everyone, and good night to you, too, tom. >> tom: good night, susie. i'm tom hudson. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: this program was made possible by contributions to your pbs

station from viewers like you. thank you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org >> more information about investing is available in to order this dvd, call 1-800- play-pbs or visit online at shoppbs.org. >> be more. pbs.